AS WITH all summits, this week’s European Union globalisation summit at Hampton Court off London has evoked mixed reactions from the media as well as the EU leaders. While the current EU president, Prime Minister Tony Blair of Britain, went to great lengths to underscore the daunting challenges facing the world’s largest economic club, the disunity — confusion? — in the EU ranks was there for everyone to see. Blair was right in arguing that the EU has to press ahead with more drastic, and long-term reforms if it has to deal successfully with the challenge from rising Asian giants China and India. The continent, which by the virtue of spearheading the Industrial Revolution has dominated the world stage for the past three centuries, for the first time risks being left behind in the race.
That is the direct and necessary fallout of globalisation. EU has to reform and change with changing times or perish. Europe has already been feeling the heat as China floods its markets with cheap textiles, electronics and everything else and India takes away a large chunk of European jobs through outsourcing. This is why it is rather strange that the EU leaders at the Hampton Court summit did not take on the challenges like greater liberalisation, EU budget and agriculture policy and, more importantly, globalisation as they should have. And yet the UK meeting was ironically named as globalisation summit! An event, which was supposed to celebrate the EU spirit of unity and contribute in greater measure to globalisation, ended up as a non-event.
The EU trade commissioner Peter Mandelson tried to rescue the summit by offering steep cuts — 47 per cent — in farm tariffs. This, as France protested, was going too far from the EU point of view yet they fell still short of US’ and developing world’s expectations. Compare this with the 75 per cent and 54 per cent tariff cuts offered by the US and the Group of Twenty nations. Nonetheless the EU offer could revive the stalled global trade talks and pave the way for a deal at a later stage. But more than the lack of progress at the Hampton Court event it is the general mood of gloom and despair in the world’s first economic cooperation entity that is alarming.
Maybe it is a result of the recent electoral upset in Germany and France’s ‘no’ vote against the European Union constitution. But it would be a mistake to interpret the current phase of disenchantment as the signs of EU’s decay. EU remains the most powerful and successful model of economic and political cooperation. The sense of fatigue and general aimlessness that seems to have set in the EU is only momentary. However, if the economic entity doesn’t take bold and decisive steps on issues such as trade liberalisation, agricultural reforms, constitution and Turkey, it could end up as a dignified talking shop.

The arctic challenge

INVESTORS and fortune-hunters around the world are seeing a great opportunity to make billions of dollars in the melting of Arctic ice caps. The latest Polar study indicates a further erosion in the vast mass of frozen land, which may be bad news for environmentalists, but music to ears of those who want to tap the locked resources in a virgin territory. The Polar ice caps, formed millions of years ago, are known to contain vast quantities of precious rare metals, oil and gas underground. According to the US Geological Survey, one quarter of the global oil and gas reserves are lying in the Arctic depths. Until recently, no country had the requisite technology to explore the riches of the frozen continent or intention to exploit them in view of the prohibitive cost involved. The only interest in the ice caps is its flora and fauna and international teams of scientists spend months studying the Polar atmosphere and geology.
This is all set to change, with the melting of ice. With oil prices touching new highs, satellites and cutting-edge technologies helping researchers in fathoming out the hidden treasures, advanced countries and Arctic nations are now focusing their attention on the least inhabited corner of the globe. The race for claiming a piece of the uncharted territory has already begun with many oil and gas-related companies and shipping lines moving in and some giant corporations eyeing the area for future business. Not to be left behind in the Arctic rush for riches, countries with economic and technological muscle are trying to mark their presence in the vast frigid area. The international competition for exploiting the Arctic wealth will intensify when more and more ice gives way to blue waters in the coming decades, opening up a new continent with abundant energy and new sea routes for faster global trade. These possibilities raise many questions, such as the territorial rights, ownerships, share of natural resources, environment protection, etc., which have not been adequately addressed so far by the international community. The current UN laws on sea do not cover most of the issues that surface when the Arctic development begins. Although the quest for the new energy frontier is in a nascent stage, it’s going to be a challenge and a test for the countries involved in the hot pursuit for cold riches.

—Khaleej Times